Railroad becomes software company

InformationWeek's Rob Preston recently published an interesting articleon how one of the nation's largest railroads decided it should also build its own software. Not only does this fly in the face of all the conventional wisdom that says packaged and SaaS applications are the way to go, but it puts the railroad itself in the software business.

More evidence of the lines blurring between technology vendors and consumers.

In the porcess, the Union Pacific Railroad "generates $35 million to $40 million in revenue a year selling or licensing some of those technology innovations to other companies, including rivals, creating a small profit center within its $300 million-a-year IT cost center," Preston writes.

The company -- which operates one of the biggest shipping and transportation oeprations in North America, required software and systems too complex for the mass-market package vendors to service, such as supply chain applications, and even its own firewalls. Service oriented architecture is part of this effort, the article adds.

The company has also built its own gaming software, a Flight Simulator-type application ntended to help train engineers, conductors and inspectors in virtual environments. This may be the ultimate profit center: "The company is now looking to sell that software to other railroad companies, as well as to construction, mining, and energy companies, under its PS Technology unit."

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